Startupfest 2016: JEFF BAIKOWITZ (MotherFood) - Future of
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The document discusses the future of social enterprises that address malnutrition. It notes that over 150 countries suffer from malnutrition, which is both a major problem and opportunity. After discussing different models like charities and businesses, it argues that a social enterprise approach is needed. The social enterprise would develop affordable, nutritious food products tailored for underserved populations in developing countries. It would pursue a disruptive go-to-market strategy using local ingredients, manufacturers and entrepreneurs to best serve its target markets.
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Startupfest 2016: JEFF BAIKOWITZ (MotherFood) - Future of
- 2. Actually the future of Social Enterprise, with a case study.
- 5. Charity •Cause •Mission •Theory of Change •Donors •Stakeholders •Beneficiaries •Programs •Surplus/Deficit •Social return on investment Business •Industry •Opportunity •Go to Market Strategy •Investors •Shareholders •Customers •Products •Profit/Loss •Financial return on investment
- 8. What’s the cause /What’s the cause / businessbusiness opportunityopportunity??
- 10. The first 1,000 days last forever
- 13. ““A great, unrecognized disaster.”A great, unrecognized disaster.” - Jim Yong Kim, World Bank- Jim Yong Kim, World Bank
- 14. We know the ‘cure’: Folate ZincIronIodine Vitamin A
- 15. Poverty rates have declined Source: Our World In Data
- 16. But 156 countries suffer from malnutrition
- 17. The world’s biggest problem… … and it’s growing.
- 18. This is a big problem (this is also a big opportunity)
- 19. Where do we start?Where do we start? (what’s our target maket?)(what’s our target maket?)
- 22. We ignore the middle billions. $100 $60,000
- 25. The First 500 days
- 28. (Now we know our target market.) Global Chronically malnourished Middle Billions Agrarian Adolescent girls Pregnant and lactating women Infants
- 29. What’s the rightWhat’s the right productproduct??
- 30. Charities typically target needs not wants.
- 31. (This is a miracle. But it’s not a sustainable business model. Nor does it claim to be.)
- 33. Our Minimum Viable Product: Flavor, format, convenience, price, marketing
- 34. “We believe it will be new companies more than old ones that will help those living on a few dollars a day move out of poverty.” - Harvard Business Review
- 36. We have competition.We have competition.
- 38. But startups succeed with disruptive strategies
- 39. Disruption is possible + necessary Social Good • Aid Agencies Enterprises • Multinational Corporations
- 40. • Access to early channels: local flavors, local ingredients, local manufacturers, local entreprenneurs
- 41. New Distribution Models.New Distribution Models.
- 42. Strategy: Nutrition: Data: Product Development: Flavors: Unfair Advantage – Idealistic Passion
- 43. Targets needs, not wants Complex governance Relies on donations Finite resources Lack of scale Social enterprise
- 44. Profit motive above all Best customer is addict Often cause social harm Everyone is a market to exploit Social enterprise
- 45. Social enterprise Problems are also opportunities Beneficiaries are also consumers Consumers are also entrepreneurs Solutions are products & programs Sustainable change = Business viability
- 46. Thank you
Editor's Notes
- Hi my name is Jeffrey Baikowitz and I truly believe that food can change the world
- You came here to learn about the future of food. I lied (a bit.) I’m actually talking about Social Entreprenneurship and Social ’startups’, and in particular how a the use of data and a focus on social impact can help you choose the most effective mission and strategy
- Some background on me: I’ve founded or co-founded about 20 successful startups to date, about one a year. I’ve sold a few, but continue to help my partners manage about 15 different companies.
- I’ve also served as the Chairman of leading international non-profits for the past decade. that have had high leverage and high impact. And I've been struck by the similarities and differences of running for profits and non-profits. In the past few years, there has been much discussions about social enterprises and how the innovation and pragmatism of business could be attached to bold social missions and provide a triple bottom line for investors: social, environmental and financial. It is an opportunity for us to be better at making sustainable social changes across all social sectors, and put an end to top-down paternalistic aid that has failed too many times in too many places. Hundreds of McGill students have submitted plans to our Social Enterprise business case competition. – we’re using a market based approach. This is intentionally a scaleable business discussion rather than a discussion about a social problem. – NGOs and governments have been the typical approach
- Social good enterprises – everybody wants to ‘make a difference’– why is this so hard? One for one is not always great – to be sustainable need to be resilient and desired and produce results – a truly sustainable social business is tough. You need to approach these business with even more rigour than a traditional business, because the stakes are so high, and you have many more stakeholders. - rather than discuss the industry as a whole, I wanted to share with you, how and why we developed our strategy the way we did, and the data we use to optimize our impact and sustainability. I hope that all of you that work in non-profits, serve on charity boards and run social enterprises will also focus on facts, figures and outputs to make decisions, not just emotions driven by good intentions or good ‘causes’ Start by making a bold choice.
- Turns out someone looked into this. The best use of a dollar or an hour, in terms of social return on investment according to some of the smartest scientists and economists in the world, is micronutrients at the start of life
- I’d like to start with Impact and work backwards. Most charities focus on inputs rather than outputsIf you’re looking for a business opportunity, be bold? What would—in social entrepreneurship mindset—the biggest opportunity be?
- Malnutrition is not the same as undernutrition –
- Harvard University in a recent study calculated that stunting costs countries 177 billion dollars.
- Miranto is 5 years old. He proudly wears his school uniform, a blue smock. He’s been in school for two years, where he’s on track and has made dozens of friends. Sitraka is a head shorter than Miranto and looks about half his age. He’s not wearing any shoes These 2 Boys Were Born The Same Day In The Same Town, But Their Lives Will Be Dramatically Different – once you’re stunted, you can’t fix it
- He’s still learning to speak and has trouble sitting or standing still for any length of time, which means he can’t go to school and has trouble making new friends. Both boys were born in the same village and they were born on the very same day. They are both 5 years old
- Stunting costs the world an estimated 177 billion dollars a year according to a recent Harvard study Chronic malnutrition is also known as ‘hidden hunger’ 1/3 of children in the developing world are stunted – estimated 160 million children Total cost of malnutrition about 2 trillion dollars a year Children born in developing countries this year will lose more than $177 billion in potential life-time earnings because of stunting and other delays in physical development, - Harvard University Study
- We don’t need to discover a ‘cure’ we know what works, and it costs around 10 cents per day. Iodine: Decreased infant mortality and higher birth weights. Vitamin A: Improved birth weight and neonatal growth and reduce the prevalence of anemia in infants. Iron: Supports normal brain development in the fetus. In the third trimester of pregnancy, the fetus builds iron stores for the first six months of life. Decreased Maternal mortality Zinc: Reduction in the incidence or severity of maternal infections, which are a known risk factor for premature birth. Folate: Helps prevent neural tube defects (NTDs) – serious birth defects of the spinal cord and the brain (such as anencephaly). Reduces risk of other defects as well, such as cleft lip, cleft palate, and certain types of heart defects.
- We’ve made great strides reducing poverty in the last 200 years.
- But malnutrition—the lack of nutrients—remains unsolved. Not only in poor countries, but in all of them.
- Total annual cost according to the UN – 3.5 trillion dollars per year – disability, lack of productivity. Every year 550,000 women die in pregnancy and childbirth - the leading cause of death amongst adolescent girls in most developing countries 4 million infants die within 1 month of birth. It is estimated that 18 million babies are born with low birth weight every year, half in South Asia , they account for 60–80% of neonatal deaths (MSF) In Sub-Saharan Africa, the lifetime risk of dying in childbirth is 1 in 39. In Canada its 1 in 8800 These statistics are unacceptable in 2016 when we have the knowledge and resources to stop this. 800 women die every single day due to avoidable complications related to pregnancy
- Target market, consumers are all ‘business’ words and seem awkward when talking about the worst problem in the world. But businesses are systems, and we need the most effective systems to overcome these problems. Rather than look at the greatest need, I look towards where I can have the greatest impact.
- Target market, consumers are all ‘business’ words and seem awkward when talking about the worst problem in the world. But businesses are systems, and we need the most effective systems to overcome these problems. Rather than look at the greatest need, I look towards where I can have the greatest impact.
- The vast majority of infant deaths are in middle income countries with moderate malnutrition – particularly southeast Asia
- You can see here where the estimated 3 billion malnourished live. Mainly middle income countries in Southeast Asia. The middle billions
- The chronically malnourished middle billions in middle income countries are too poor to be served by corporations, too ‘well off’ to be served by relief agencies. 50% of them are small farmers. They make food choices, the same way we do – taste, convenience, price, marketing, nutrition Yet they have trillions of dollars of disposable income that they spend on packaged food. But guess who’s getting there first….
- 3 to 4 times the rate of stunting in rural communities in many middle income countries like China. About 50% of the rural poor are small farmers who are growing the food we need to feed the world.
- Colombia is a great example of a middle income country with a growing economy, GNI close to $15,000 per person, but an indigenous community with 90% of the children malnourished. This is where we ran our first trials. With the help of Canadian coffee importers RGC coffee.
- Target market, consumers are all ‘business’ words and seem awkward when talking about the worst problem in the world. But businesses are systems, and we need the most effective systems to overcome these problems. Rather than look at the greatest need, I look towards where I can have the greatest impact.
- Target market, consumers are all ‘business’ words and seem awkward when talking about the worst problem in the world. But businesses are systems, and we need the most effective systems to overcome these problems. Rather than look at the greatest need, I look towards where I can have the greatest impact.
- Strive for simplicity, but embrace complexity – flavors and tastes vary from region to region. In India tastes can change every 20 kms. Local populations are helping us design these products from the ground up. This is far better than us forcing our unhealthy north american diets on to them. Taste is the forgotten factor in the current solutions. – product design matters. Everything should be made as simple as possible but not simpler – Albert Einstein
- Strive for simplicity, but embrace complexity – flavors and tastes vary from region to region. In India tastes can change every 20 kms. Local populations are helping us design these products from the ground up. This is far better than us forcing our unhealthy north american diets on to them. Taste is the forgotten factor in the current solutions. – product design matters. Everything should be made as simple as possible but not simpler – Albert Einstein
- Strive for simplicity, but embrace complexity – flavors and tastes vary from region to region. In India tastes can change every 20 kms. Local populations are helping us design these products from the ground up. This is far better than us forcing our unhealthy north american diets on to them. Taste is the forgotten factor in the current solutions. – product design matters. Everything should be made as simple as possible but not simpler – Albert Einstein
- Approach the chronically malnourished as ‘consumers’ rather than victims, allow them to help develop their own solutions rather than repeating our top down paternalistic approach that has failed for decades.
- Target market, consumers are all ‘business’ words and seem awkward when talking about the worst problem in the world. But businesses are systems, and we need the most effective systems to overcome these problems. Rather than look at the greatest need, I look towards where I can have the greatest impact.
- As consumers gain more disposable income, they start buying North American products and move from malnourished undernourished to malnourished obese. We need to offer them great tasting healthy alternatives, to avoid the destructive eating habits that we have adopted in the West. We’re competing for hearts and mouth against the best marketing companies in the world. We need to optimize everything, -not just nutrition Taste if the neglected factor amongst aid agency nutritional solutions
- There are plenty of incumbents. But they’re vulnerable. Just as Blockbuster was addicted to late fees and in-store sales, and couldn’t become Netflix, so organizations are reluctant to cannibalize their own models. The incumbent have too much inertia to pivot. In malnutrition, this means aid agencies reject commercial initiatives that could be self-sustaining; and that global multinationals have shareholder obligations that force them to profit at all cost and own the means of production, and their ideal target market is addicted to sugar and fat and the margins of marketing.
- Target market, consumers are all ‘business’ words and seem awkward when talking about the worst problem in the world. But businesses are systems, and we need the most effective systems to overcome these problems. Rather than look at the greatest need, I look towards where I can have the greatest impact.
- Uber could not work until google maps was optimized and everyone had a smartphone and accustomed to ratings systems and online payments. Similarly, the rise of peer to peer distribution (thanks to Grameen bank and other micro enterprises) and smartphones for distribution and analytics makes this possible. We can ‘out-market’ the multinational giants like Coca-Cola with peer to peer communication and distribution and local flavors and formats.
- It’s also critical that you have some unfair advantages. Ours are the partners and organizations we’re working with.
- Need to break the underlying systems that perpetuate poverty and malnutrition, not just address the symptoms. We do this by fostering trade and entreprenneurship within the country as well as a market approach to sustainable nutrition.
- The future of food is sustainably nourishing mothers, adolescent girls and their babies. This is what will truly 'change the world'